3 steps to switching your bank account

As Treasurer Scott Morrison and the Big Four banks slug it out over the Budget’s $6 billion levy, making sure you are with the right sized financial institution has been thrown under the spotlight.

Morrison warned the big banks that if they try and claw back the levy, he will advise customers to go elsewhere- especially to the smaller banks like the Bendigo.

We all know why the Treasurer was able to tell Anna Bligh, CEO of the Bankers’ Association: “Pony up! They hate you anyway…”

But switching is such a hassle that you’d only consider it on a rainy day when there’s nothing on Netflix and you’ve already cleaned the house. Research by RFi has shown that only 10% of Australians are switching accounts. Despite what the banks believe, this is not because the other 90% are happy with their current bank.

Now Really Simple Money is all about democratising financial knowledge. So we’ve uncovered a little-known secret about switching and have some good news, too, about your power to decide.

1) Find a new bank

You’ll be looking for lower fees, better service and a higher savings account interest rate. You might even want a cash incentive for joining. But you won’t have to rely on internet research or word of mouth.

In a move announced in this week’s Budget, from 2018 you will be able to ask your bank to send your data to rival banks to see if they can develop a better deal for you. Third-parties will also be able to provide this detailed analysis. Your transaction account data is very valuable to your bank so you should be able to get the most out of it, too.

2) Get your new bank to do the hard work

Your new bank can ask your old bank for a statement of transactions going back 13 months, and then take care of moving over all those direct debits and credits. Yes, you read that right. This little-known secret was announced by the Government in 2012 and only a handful of customers have used it.

Unfortunately, this excludes BPAY, Pay Anyone or recurring payments where you’ve provided your debit card number. And it takes two weeks to set up.

3) Close your account

The longer you keep both open, the longer you’re paying duplicate fees. Before you close your account, make sure all your direct debits are going to the right place. Print your pay anyone list and BPAY payments and let all your merchants know of your new debit card number or account number.

This is all still quite clunky, but having a single payments platform will pave the way for a single account number.

But keep your old bank account open for a short while just in case any direct debits haven’t been transferred properly. I was stung once with a $50 overdue payment fee on my credit card because I hadn’t given them my new details.

Last Word:

Later in 2017, a new payments platform is being launched in Australia. By linking a single identifier like a mobile number to your account, you’ll be able to make and receive payments through a fast payment app. You won’t need to share a BSB or account number and money is transferred instantly.

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The information available on this site is intended as general advice only. It is not personal advice and must not be relied upon as such. Really Simple Money Pty Ltd does not make any representation or warranty, express or implied, as to its accuracy, timeliness or completeness. The circumstances and investment objectives of individual users have not been taken into account in the preparation of material on this website.
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